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IWG plans shift to master franchising model

IWG PLC is looking to emulate a "McDonald's-style franchising model" in the next two to three years that would entail master franchise deals to operate flexible workplaces under the IWG brand, London's Financial Times reported.

The shared-office provider, which had been looking to sell off parts of its business earlier in 2019, is now seeking to replicate a master franchise deal it agreed to in Japan whereby it sold its Japanese arm for £320 million to TKP, which will operate the spaces under IWG's brands.

The move is meant to simplify its business and boost growth as it competes with IPO-hopeful rival WeWork Cos. Inc., the publication added, citing IWG CEO Mark Dixon.

Dixon cited the example of InterContinental Hotels Group PLC, noting that the hotel company sold its properties to become a franchising and licensing business.